Alfa Says Pacific Bid Non-Negotiable as Investor Group Balks

Alfa SAB said its offer to buy Colombia’s Pacific Rubiales Energy Corp. isn’t negotiable, even as a group of Venezuelan investors considers a counter bid or organizing other stockholders to block the deal.

The C$6.50-a-share would boost Alfa’s 19 percent stake to 50 percent, Chief Financial Officer Ramon Leal said in a telephone interview Thursday. Mexico’s Alfa is teaming with Harbour Energy Ltd., which would spend about $850 million for the other half of Pacific Rubiales, Leal said.

“The price is defined,” Leal said. “It isn’t negotiable and it’s been accepted by the board of directors of Pacific Rubiales.”

Investors led by Caracas-based Alejandro Betancourt say they may seek to block the takeover, which needs the approval of two-thirds of shareholders. The group said before the bid was accepted by Pacific Rubiales late Wednesday that it might increase its 19.5 percent stake to help scuttle the deal.

Neither Alfa nor Harbour will guarantee or absorb any of Pacific Rubiales’s debt or consolidate the company’s results on their balance sheets, Leal said.

Alfa is seeking to expand in oil as its home nation opens production to foreign investment. Pacific Rubiales produces about 150,000 barrels a day mostly in Colombia and wants to bid for Mexican fields.

Alfa may obtain a three-year bridge loan for the deal, Leal said. The San Pedro Garza Garcia, Mexico-based company is considering JPMorgan Chase & Co. or Credit Suisse Group AG, among other banks, to handle the loan, which might be repaid if Alfa proceeds with its plan for initial public offerings of its Nemak and Sigma units, he said.

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